Seeing Blue
By Suzanne Deffree -- EDN, January 4, 2006
LAS VEGAS – The industry isn’t seeing red anymore when it comes to competing DVD technology. They are seeing blue. And there giants entered the blue laser DVD ring today and started swinging at the bell.
One day ahead of the Consumer Electronics Show’s official start, Toshiba America Consumer Products, Philips Consumer Electronics and Sony announced plans for blue laser DVD players at the consumer level this year. Toshiba, a backer of the HD DVD specification, announced two models to ship in March. Philips, a backer of the Blu-ray next-generation DVD technology, announced one model to be shipped in the second half. While Sony, also a Blu-ray devotee, announced plans for a player in the summer timeframe.
The dispute between the two groups looks to be shaping up to be a main focus of this year’s show. Each side pushing what it sees as its own technology’s benefits – among them digital rights management, compatibility with current DVD technology, deals with movie production houses and huge increases in storage capacity – events from press conferences to after hour parties are planned as the groups continue to gather support for what is expected to be the year for across the CE industry board blue laser DVD player introduction.
Toshiba at its press conference today reported that DVD player sales have slowed significantly in recent years, the average consumer already owns a 25 to 30 disc library of red-laser technology DVDs. Therefore, Jodi Sally, VP of marketing for the company’s digital A/V group, pushed backward compatibility as a key driver for consumer adoption.
HD DVD is an evolution of the DVD format,” she said. “There’s no doubt about it that HD DVD represents the best value to our consumers, our partners manufacturers and the content community. This value is specifically represented in the major characteristics of the format – high definition packaged media utilizing advanced codecs and high resolution audio – but at the same digital disc structure as the current DVD discs, which is important to allow for seamless market transition.”
Philips Consumer Electronics CEO Rudy Provoost, who noted during the company’s press event this afternoon that it will be expanding its relationship with Microsoft, pushed high definition visual quality and work in the DVD PC arena. “Philips is uniquely positioned to take advantage of Blu-ray’s appeal by our introduction of the Blu-ray consumer player and a triple writer for PCs. Blu-ray delivers the absolute best in picture quality, better than any other [high definition] source. This quality, we have found, is the most important feature consumers look for when they upgrade – even more important that large storage capacity,” he said.
Sony, meanwhile, touching on next-generation DVD plans for the PC space and its Playstation gaming platform, presumably holding details for its keynote presentation tomorrow morning, pressed content distribution as an adoption driver. “Blu-ray represents a giant leap forward in content packaging. This view is shared by a variety of the entertainment companies,” Sony Senior VP Rand Waynick said at the company’s press event late today.
While the technology’s introduction is planned, mass acceptance of blue devices is not anticipated in 2006. Sean Wargo, director of industry analysis at the Consumer Electronics Association, the group that hosts CES, expects that a mere 600,000 blue laser DVD will be shipped this year. Toshiba, meanwhile, foresees a two-year ramp up cycle as consumers gain knowledge of the next-generation benefits of blue lasers, which include significantly more storage for DVD extras like video games, cast interviews and behind-the-scenes spots.
Admits Provoost at Philips, the battle between the two types of blue laser DVD will be an obstacle to consumer acceptance. “There is still some doubt in the HD DVD versus Blu-ray debate,” the CEO said when asked for market predictions. “I cannot say anything concrete.”
One further obstacle, noted Richard Doherty, director at The Envisioneering Group, is price. Philips refused to supply pricing of its planned model, only saying it will be competitive with the market. Sony gave no pricing indications. And Toshiba announced prices of $999 and $499 on its two models. “That was higher than we thought they might have gone,” Doherty said.
Doherty describes the current next-generation DVD war as one similar to the previous red-laser DVD days. “There are a lot of echoes of the early DVD era. This is like 1995 when DVD entered and the price points where very high,” he said, recalling $800 averages. “Certainly, the R&D dollars need to be recovered.”
Doherty noted that his firm expects there will be some very low cost PC add-ons, but that the pricing issue “isn’t over by any means. The few prices we have heard are very similar to the early multimedia CD versus SD, which today are DVD.”
Neither Blu-Ray or HD DVD has the upper hand at this point, the analyst concluded. “We’re just at the beginning here.”
